India’s foreign exchange reserves rose by $5.17 billion to reach $696.65 billion for the week ended June 6, according to data released by the Reserve Bank of India (RBI) on Friday. The increase reverses the previous week’s decline of $1.237 billion and brings the reserves closer to their record high of $704.885 billion touched in end-September 2024.With the weekly jump, the forex kitty is close to its all-time high of $704.89 billion in September 2024.The rise in reserves was driven by a broad-based gain across key components. Foreign currency assets (FCAs), the largest component of the reserves, climbed by $3.47 billion to $587.68 billion. FCAs expressed in dollar terms include the impact of appreciation or depreciation of major global currencies such as the euro, pound, and yen, which are also part of the basket.Gold reserves recorded a sharp rise of $1.58 billion during the week, taking the total to $85.88 billion. The increase in value reflects both higher global gold prices and possibly increased central bank holdings, PTI reported.India’s Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) also rose by $102 million to $18.67 billion. Meanwhile, the country’s reserve position with the IMF edged up by $14 million to $4.4 billion.The latest surge in reserves comes amid a volatile global environment marked by geopolitical risks and rising commodity prices, with the rupee facing renewed pressure due to tensions in the Middle East. The RBI’s robust reserve position is expected to support its efforts to stabilise the currency and manage external shocks.India’s forex reserves provide a vital buffer against global financial turbulence and are a key indicator of macroeconomic strength, helping to ensure stability in the exchange rate and confidence among investors.
